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Santa Cruz, CA.‘ 95060

'JEFFREY F. ROSEN, Santa Clara County District AttOrney I ‘

JAN 0 8 2013_

L ELECTRONICALLY RECEIVED ~

_ 12/28/2017 1:34 PM. . .

f JEFFREY S. ROSELL, Santa Cruz County District Attorney 1 Exempt from f 1mg fee under FRANCISCA B. ALLEN, SBN 99402 Government Code §6103 DOUGLAS B. ALLEN, SBN 99239 " *-

Assistant District Attorney douglas. allen@$an_tacruzcounty. us -

7010ceanStreet, SuiteZOO . .

A

I

EL E1

Telephone: (408) 831-454-2930

JENNIFER DENG',‘ SBN 206285 Deputy District Attorney jdeng@da. sccgov. org 70 West Hedding Street, West Wing San Jose, California 95110 Telephone: (408) 792- 2875

LANE DILG, Santa Monica City Attorney ADAM RADINSKY, SBN 126208 .

_

_

GARY RHOADES, SBN 166149 ~ - '

' . . ' .

Deputy City Attorneys ‘

adam. radinsky@smgov. net 1685 Main Street, Room 310 Santa Monica, California 90401 Telephone: (310) 45 8 8336

'

ALLISON HALEY, Napa County District Attorney PATRICK COLLINS, SBN 253872

‘ , .

Deputy District AttOrney ' '

1

patrick. collins@countyofnapa. org 931 Parkway Mall Napa, California 94559 Telephone. (707) 2534211

5'4 '

‘

‘ CAL O, CLERK

.4 STEPHANIE A. BRIDGETT, Shasta County District Attorney ‘ ‘

.1

ANAND “LUCKY” JESRANI, SBN 23 8252

a

Senior Deputy District Attorney Ljesrani@co. shasta. ca. us 1355 West Street

_

~''

Redding, California 96001 Telephone: (530) 245- -6300_

Attorneys for Plaintiff PEOPLE OF THE STATE OF CALIFORNIA

SUPERIOR COURT OF THE STATE OF CALIFORNIAI

’

FOR THE COUNTY OF SANTA CRUZ

PEOPLE OF THE STATE OF CASE No.17cvo3314 CALIFORNIA; ~ - .

plaintiff FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION

v. ,

El-IARMONY, INCL,

_ Defendant,

WESN78743974.7 . - 1..

FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION

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, Plaintiff, the Peeple of the State Of California (“the People” or “Plaintiff’), appearing

through its attorneys, Jeffrey S. Rosell, Santa Cruz County District Attorney by Francisca B.

Allen and Douglas B. Allen, Assistant District Attorneys; Jeffrey F. Rosen, Santa Clara County

District Attorney by Jennifer Deng, Deputy District Attorney; Lane Dilg, Santa Monica City

Attorney by Adam Radinsky and Gary Rhoades, Deputy City Attorneys; Allison Haley, Napa

County District Attorney by Patrick Collins, Deputy District Attorney; Stephanie A. Bridgett,

Shasta county District Attorney by Anand “Lucky” Jesrani, Senior Deputy District Attorney, and

having filed its complaint herein; .

I

Defendant eHarmony, Inc. (“eHar1nony’.’ or “Defendant”), appearing through its attorneys

DLA Piper LLP-by Paul J. Hall, Esq., and having accepted service of the complaint; I

'

1. Plaintiff and Defendant having negotiated and agreed to a settlement including“

stipulating to the entry of this Final Judgment and Injunction Pursuant to Stipulation

(“Judgment”) prior to the taking of any proof and without admission of fact or fault by Defendant,

or any of 1ts current or former officers, employees, directors, agents, representatives, and without

trial or adjudication of any issue of fact or law; and',

The Court having considered the pleadings and good cause appearing,_

IT IS HEREBY ORDERED, ADJ UDGED AND DECREED that Plaintiff have Judgment

against Defendant as follows:

JURISDICTION AND VENUE

2. This action is brought under the laws of the State of California. This Court has

jurisdiction of the Subject matter and the parties. Venue is appropriate in this Court..

CONSENT DEGREE .

'

E

3. ‘

I

The provisions of this Judgment are applicable to eHarmony and to its officers,

employees, directors, agents, representatives, successors, and-assigns acting within the course and

scope 5of their agency or employment and in concert with eHarmony. Defendant consents to entry‘

of this! Judgment without the taking of proof or admission of facts. Nothing 1n the Complaint In

this action, the accompanying Stipulation, this Judgment, the negotiations leading up to these1

filings, or any action taken to carry them out shall be construed as an admission by Defendant, or wssm78743974. 7 . . . , .2-

. 5

FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION_

-

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by any of its current or former officers; employees, directors, agents, representatives, successors,

and assigns, or by any-entity,-'individual, or-organization' involved in'the settleme’ntof this action.

. 2mm,

4-. For purposes of this Judgment, the following def muons apply:

a. ' “AUTOMATIC RENEWAL’.’ means a plan or arrangement in which a paid

subscription or purchasing agreement is automatically renewed at the end of a definite term for/a

subsequent term. It also includes “free trial” offers that convert to automatic payment unless

cancelled by the consumer. '

,

l

b. “Automatic ReneWal Offer Terms” includes:l

i. A statement‘that thesubscription or purchasing agreement will

,continue until the Censumer cancels;)

A description of the cancellation policy that applies to the offer;

"iii. The recurring charges that will be charged to the consumer as part

of the automatic renewal plan; and that the amount of the charge may change (if applicable); and

the amount to which the charge will change (1f known),

iv. The length of the automatic reneWal term. Or'that the service is

continuous, unless the length of the term is chosen by the conSUmer; and

_

v. '-

The minimum purchase-'obligation, if any.

' c. '

“CALIFORNIA CONSUMER” means a customer of eI-Iarmony with a

billing zip code 1n the State of California.5

d. - “CLEAR AND CONSPICUOUS” means in larger type than‘the

surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or

set off from the surrounding text of the same size by symbols or other marks,’ 1n a manner that

clearly calls-attention to the language. In the case of an audio disclosure, it means in a volume and

cadence sufficient to'be readily audible and understandable.

e. , “CONTINUOUS SERVICE” means arplan or arrangement in whiCh a

-

subscription or p'Urchasing agreementcontinues until the consumer cancels'the service.

wasm18743974.7 .

' '

.13-

. FINAL J UD-GIVIEVNT AND INJUNCTION PURSUANT TO STIPULATION

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.INJUNCTION

,5. .

» Pursuant to Business and Professions Code sections 17203 and 17535, eI-Iarmony

and its officers,_employees, directors, agents, representatives, successors, and assigns acting .

1 within the course and scope of their agency or employment are enjoined and restrained from

engaging in. any of the following acts or practices within theState of California:

.

- a. Making anyvfalse or misleading representations intended to promote sales

on its website, advertising, orany other form of marketing.-

' b. ' '

Failing to abide by all applicable laws relating to contract cancellations;

- Automatic Renewal: Disclosure .

A

a. .

Failing to present the AUTOMATIC RENEWAL OFFER TERMS in a

CLEAR AND CONSPICUOUS manner before the subscription or purchasing agreement is

fulfilled and in visual proximity to the request for consent to the offer, and any applicable

disclosure requirements of the Restore Online Shoppers Confidence Act, 15 U.S.C. §§ 840I et_

seq. ‘ V

I i l

‘

Automatic Renewal: Affirmative Consent _

,

a. . Charging a CALIFORNIA CONSUMERS’ credit or debit card or accountV

with a third party for an AUTOMATIC RENEWAL or CONTINUOUS SERVICE without first

obtaining the c0nsumer' s affirmative consent to the agreement containing the AUTOMATIC'

RENEWAL OFFER TERMS. For online and- written Orders this consent shall include the

following: 1‘ t

l) , The consent isobtained by an express act by the consumer'through

a check-box, signature, orlother substantially similar mechanism that consumers must

affirmatively select or sign to accept the AUTOMATIC RENEWAL OFFER TERMS and no.

other part of the transaction.

, 2) . In visual proximity to the consent mechanism referred to in the

preceding sub-paragraph, the AUTOMATIC RENEWAL OFFER TERMS shall be disclosed.

This disclosure shall contain no additional information and shall be CLEAR AND wEsm787-13974 .7 -47,

FINAL JUDGMENT AND INJUNCTIQN PURSUANT TO STIPULATI ON

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CONSPICUOUS. -.

Automatic Renewal: Acknowledgement ‘ ~

, _

a. 1 With any AUTOMATIC RENEWAL'or CONTINUOUS SERVICE offer

to (a consumer, failing to provide an emailed cenfirmatio'n of the-transaction immediately after the_

contract is made;.This Confirmation must comply with the following:

I) ' '

Its subject line'muSt clearly identify 1t asa confirmatiOn :of the

transaction; and I

l I

_

I

2) It must CLEARLY AND CONSPICUOUSLY disclose the

AUTOMATIC RENEWAL OFFER TERMS. '

. Automatic Renewal: Cancellation .

a. Failing to provide a toll-free telephone number, or electronic mail address,

or a postal address only when eHarmony directlyibills the CALIFORNIA CONSUMER, or

anOther cost—effedive, timely, and teasy-to-use' mechanism for‘canCellation.‘

i. ,. For all-CALIFORNIA CONSUMERS, Defendant must allow a

buyer to give written notice of cancellation byemailto an email address provided by Defendant. -

Additional electronic means of cancellation may be provided by the agreement or Otter.

I

ii. 3 ‘All cancellations must be effective within. one business day of -

Defendant’s receipt of the cancellation request. UpOn canoellation, the-CALIFORNIA '

CONSUMER will not be charged eny further fees unless. such fees are'already subject to an

existing valid contractual obligation. ' '

,

,>

’ Dating Services Contract Law I

A

.

a: -

I

Failing to include the following notice either (a) on the contract’s face and

in close proximity to: the space reserved for the signature of the CALIFORNIA CONSUMER a.

conspicuous statement in a size equal to at least 10-point boldface type, or (b) in a CLEAR AND

CONSPICUOUS manner in a

stand-:alone first paragraph of the contract, the following‘nwotice:

i.» “You, the buyer, may cancel this agreement, without any penalty or

obligation, at any time prior to midnight of the original contract seller’s third business day'

I

following the date of this contract, excluding Sundays and holidays. To cancel this agreement, WES'I\278743974 .7 - -5— .

' '

1 - FINAL JUDGMENT AND INIUNCTION PURSUANT TO STIPULA'TION

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mail or deliver a signed and dated notice, or send a telegram which states that you, the buyer, are

canceling this agreement, or words of similar effect, or by email or on the website.”

ii. The notice shall include the name and address and email address to

which suchcancellations must be sent.

b. Failing to make a copy of the contract available to the CALIFORNIA

CONSUMER that is provided in a CLEAR AND CONSPICUOUS manner on the Internet

' website page where the buyer provides consent to the agreement, and, upon request by the-buyer,

a digital copy of the contract in PDF format or other retainable digital format.

c. Failing to allow a consumer to cancel membership, With prorated refund,

due to death, disability, or moving to an area not covered by eHarmony’s services, in accordance

with the standards of Civil Code §l694.3.

d. '

Requiring payments or financing by a CALIFORNIA CONSUMER in

excess of two years from the date the contract is entered into. However, the preceding sentence

shall not apply if the initial term is one year or less, and subsequent terms are for one year or less.

Uniform Electronic Transactions Act

a. Violating the California Uniform Electronic Transactions Act, Civil Code

sections 1633.1 et. seq., including the rules that all contracts formed by electronic signature must

also allow electronic cancellation.

:Customer Debt Collection Practices ~

a. Attempting to collect past due membership fees from customers, incurred

prior to the effective date of this Judgment, either directly or through other entities.

i. Ifa CALIFORNIA CONSUMER notifies Defendant ofa negative

mark or reference On the customer’s credit report resulting from Defendant’s referral of their debt

to third—party co’llectiOn companies, Defendant mustwithin five (5) business days of such notice

notify all three major credit reporting agencies to cancel any such negative marks or references.

ii. Defendant must adjust its internal records to reflect that any debt

previously designated as eligible for reference to third-party collection'companies shall no longer

be attempted to be, collected.

wesm78743974.7 . -6-

FINAL JUDGMENT AND INIUNC'I‘ION PURSUANT TO STIPULATION

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iii. Defendant shall maintain for five (5) years documentation sufficient

to verify compliance with the provisions of the preceding paragraph. This includes copies of all

correspondence or communications involving Defendant sufficient to verify the compliance and

the substance of any oral communications." ‘

. 6. Defendant shall have 60 days after Notice of Entry of this Judgment to comply

with the terms of the Injunction- This Final Judgment shall terminate, the injUnction shall expire,

and the obligations herein shall end (with the exception of the provisions related to the payment '

of penalties, restitution, ‘

and costs, Which shall remain in effect until 1fi111y paid) without any

further acts by any party or the Court by five (5) years after the entry of this Final Judgment,

unless the Court determines (upon consideration of the parties’ pleadings, evidentiary

submissions, and arguments) that DEFENDANTS have not-substantially complied 1n material

respects with the inj'un'ctive p‘rovisio'nsof Paragraph ‘4 above, the restitution provisions of

Paragraphs 10-34 below, and the full payment df all penalty and cost Obligations outlined in

/ Paragraphs 7'49 below, in which case the 'F inal Judgment may be extended within the discretion of'

the Court for geod cause shown. ' ‘ - -

‘ -

'

.

. » *

CIVIL PENALTIES AND INVESTIGATIVE COSTS I

7. PurSuant to Business and Professions Code sections 17206 and 17536, Defendant

shall pay to the People civil pena‘lties‘in the total 'sum of $1 ,205, 00000.L

8. , Defendant [shall pay the People’s collective investigative costs in the amount of

$75, 000. 00. The above amounts shall be paid collectively by checks payable to the Santa Cruz

County District Attorney’s Office in the amount of $1,280, 000.00 The civil penalties and

investigative costs will be divided proportionately betWeen the offices representing the People 1n

this case pursuant to counsel’ 5 agreement and law.

9. _' The checks described in the preceding paragraph shall be delivered to Assistant

District Attorney Douglas Allen, .Santa Cruz county District Attorney’s Office, within 15

business days of Not1ce of Entry of this Judgment. w. -10. -

'

Pursuant to Business and Professions Code seetions 17203 "and 17535, Defendant WESN78743974J _

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‘

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\- FINAL'JUDGMENT AND INJUNCTION'PURSUANT T0 STIPULATION

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shall pay restitution as follows.

Restitution Fund '

,

.

- »

,

‘ V-

11'; Within five business days after the Claims Administrator has been appointed by

the Court and the Claims Administrator has set up an appropriate trust account for this settlement

and so notified Plaintiff and Defendant, the Defendant shall deposit $250, 000. 00 into a designated

trust account known as “the Restitution Fund.”

12, ,

'

The Restitution Fund shall be under the control and operatibn of the Claims

Administrator. Except as otherwise provided in thisJudgment," the money in the Restitution Fund

shall be used only. for paying restitution to personson the Final‘List of Payees who are entitled to

receive cash restitution.

I r i

13. If anyfunds from the initial deposit remain after restitution payments to the Final

List of Payees are completed, as provided in Paragraph 27, the remainder shall be returned to

Defendant clo the DLA Piper LLP (US) Client Trust Account for the benefit of Defendant. If the

initial deposit is insufficient to satisfy the restitution obligations to the Final List Of Payees, then

within five (5) business days after Defendant’s receipt from the Claims Administrator of written

notice of insufficiency, Defendant shall depositinto the Restitution Fund so much as is necessary

to cover the restitution demands of the Final List of Payees but in no event shall Defendant be

obligated to pay more than an additional $75 0,000.00 'in cash and/or credits as provided in

Paragraph 27. If total approved restitution claims exceed $1,000,000.00, then all restitution

,Vcl’aims shall be-reduced pro rata such‘that the total amount of restitution to be paid in cash and/or 1'

credits does not exceed $1,000,000.00, except that payments to the Claims. Administrator in

excess of $75,000 shall be credited to and offset against the $1,000,000.00 maximum restitution I

amount.

Identification of Prospective Class

14. Defendant shall institute a restitution program to reimburse certain eHarmony.

membership fees paid by CALIFORNIA CONSUMERS between March 10,2012 and

December 13, 2016, provided that any such consumer (1) has not already obtained a refund for all I

money paid for such membership, and (2) meets oneof the following two requirements:

WEST\278743974.7 -8-

FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION

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a. The consumer was enrolled in an eHarmony AUTOMATIC RENEWAL or

CONTINUOUS'SERVICE plan betWCen March 10, 2012 and December 1-3', 2016 and was'

charged for at least one automatically-renewed cycle withOut his or her knowledge and consent;

or . .

I b.- The consumer previously requested cancellation of an AUTOMATIC

RENEWAL or'CONTINUOUS SERVICE plan witheHarmon‘y, or a )refund under such plan,

which request was either denied or delayed so that at leastbne additional automaticallyfrenewed

charge was made after the request for cancellation was made.'

15. The CALIFORNIA CONSUMERS who meet the criteria set forth above will beA

referred to as “El1g1ble.Rec1p1ents.” . _

16. Following the Netice of Entry-of this J udgme‘nt, Defendant shall use all reasonable

efforts to create a list of the most current, complete and accurate names, email addresses, and last-

known‘ billing zip codes and/or available postal addresses of all CALIFORNIA CONSUMERS

_

’who began an AUTOMATIC RENEWAL or CONTINUOUS SERVICE plan with Defendant any

time between March 10,2012 and December 13,2016 and whose subscriptions renewed at least'

once, and who were not fully refunded by Defendant for such subscription renewa1(s). This group

shall be referred to as the “Prospective Class. ” This list shall be contained In a spreadsheet

produced using Microsoft Excel or equivalent searchable software.

, ’

'17. Defendant shall appoint at least one management-level employee to oversee the

process of identifying the Prospective Class. This employee'shall-prepare and sign a declaration

of cOmpIiance under penalty of perjury and based on personal knowledge, which declaration shall

remain non-public and confidential except that'it may be shared with the Claims Administrator,

the People and‘this Court.'The declaration and list of Prospective Class names shall not be filed

except in the event of a dispute that requires intervention of the Court, in which case the

declaration shall be filed under seal. The declaration of: compliance shall describe the steps taken

to identify all Prospective Class members, and the electronic or other records that were searched

or queried, the manner in which they were searched, and the individualsinvolved' 1n this process.

The declaration shall also attest that the Prospective Class list 15 accurate Hand complete, to the wssm7s743974 7 .

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FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION

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best of the declarant’s knowledge and belief.

18. No later than 45 days after Notice of Entry of this Judgment, Defendant shall

transmitboth the declaration of compliance and thelist of Prospective Class members to both the

People and the Claims Administrator, KCC LLC, which was agreed upon by the parties prior to

submission of this Stipulated Final Judgment (the “Claims Administrator”). -

\ 19. If the People determine that the procedures used by Defendant to identify

Prospective Class members were deficient or that the list is otherwise materially insufficient, they

shall promptly notify Defendant of the reasons for such conclusion. The parties shall then meet

and confer and work together in a timely and good faith manner to resolve those concerns. As

part of that process, the People may obtain copies cf the information on which Defendant relied in .

ascertaining the list of Prospective Class members.

a. If the People are satisfied that any insufficiency or deficiency in the list of

Prospective Class members can‘be corrected, Defendant shall have 45 days from such notice to

implement the necessary changes and submit a revised list of Prospective Class members.

b. If the People are not satisfied that any insufficiency or deficiency has been

or can be corrected, or in the event of any other unresolved dispute regardingl'the review of

Prospective Class members, then the parties shall meet and confer to attempt to resolve the

dispute. If the meet and confer process does not produce agreement, then either party may seek

further direction from the Court.I

Consumer Notice

20. .

Within 45 days after receiving the declaration of compliance and list of

Prospective Class members, including such additional time as may be necessary to resolve any

'

deficiencies in the list, the Claims Administrator shall prepare a list of Prospective Class

members. The Claims Administrator shall promptly thereafter send or cause to be sent an email

notice to each Prospective Class member in the form and manner set forth in Exhibit A. The

Claims Administrator will take all reasonable steps to ensure that emails are not diverted to the

recipients junk” or “Spam” email folder. ‘

'.

21. If within 60 days after two attempts at sending an email notice to a Prospective

wssm7s743974.7 '

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FINAL JUDGMENT AND INIUNCTION PURSUANT TO STIPULATION

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Class member the Claims Administrator learns that the email(s) were returned as undeliverable,

the Claims Administrator'will promptly. cause to be sent a postcard via United States mail to that

Prospective Class member, in the form and manner setrforth 'inExhib-it B, provided that a mailing

address to that Prospective Class member- is available. The postcard 'shall- be sent to the

Prospective Class member’srlast-known billing address and shall state that:

-a. The postcard constitutes a final notice of the terms of this Stipulated Final

Judgment and give an email address for a restitution claim form and the-Claims Administrator’s -

website; and

A I I

I

- b.

I

'Failureto-complete and submit a restitution claim form within 60 days may

bar the recipient from recovery of restitution under'the terms of this judgment..

Claim Forms

22. In its notices (both email and postcard), the Claims Administrator shall include an

intemet address or link to a website maintained. by the Claims AdministratOr devoted exclusively»

to informing consumers about this Case, including information-about this Judgment and the

underlying action, and a restitution claim form (the “Claim Form”) which Prospective Class

members can use to claim restitutidn. The Claim Form shall be capable of completion and

' submission onlineand also of being downloaded, cemplete'd by hand and sent by hard copy to the

Claims Administrator at- a' designated mailing address. The Claims AdminiStrator shall in its

notices to Prospective Class members indicate that they have 30'days to submit the Claim Form. .

23. The-Claim Form shall require the following from ProspectiveClass' members:

'— a: - Name;

I b; Telephone number; .‘

~ ‘

.

'— '

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- c‘. . Email address;

, d-'. .' 1Mailing address where restitution check or restitution credit notification

should be sent;‘

. e. 2A declaration under. penalty of perjury that the Prospective Class member

1) ‘ , has not‘already obtained a refund for all money paid for his or her

eHarmony membership,.and '

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FINAL JUDGMENT AND INJUNC'I‘ION, PURSUANT TO STIPULATION

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2) ' either was enrolled' 1n an eHarmony AUTOMATIC RENEWAL or

CONTINUOUS SERVICE plan between March 10, 2012 and December 13, 2016 and (a) was

charged for at least one automatically—renewed cycle without his or her knowledge and, consent;

or (b) previously requested cancellation of an AUTOMATIC RENEWAL or CONTINUOUS

SERVICEAplan with eHannony, or a refund under such plan, which? request was either denied 8}

delayed so that at least one additional automatically-renewed charge was made after the request

for cancellation.

24. If the Claims Administrator receives a Claim Form or postcard that is missing

. required information or otherwise deemed to be invalid, it shall immediately inform the

Prospective Class member of the "error or deficiency. The latter shall have:30 days to correct the

error or deficiency.-

. Finalizing andPayment of Restitution Claims -

25. On or about 90 days following issuance of the initial email notice described above,

plus any additional time reasonably required by the Claims Administrator (not to exceed 30 days),

the Claims Administrator shall prepare, a preliminary list of all timely restitution claims that were

preperly completed and received (the f‘Preliminary List of Payees” or “Preliminary List”). The

Claims Administrator shall promptly send a copy of the Preliminary List to both Parties. .

I

I. 26. Defendant may elect to croscheck_ the Preliminary List against itsupdated

records to determine if any individuals on the Preliminary List either (1) Were not paying'

customers during the period in question, or (2) received a full refund from Defendant during the

claim period. Any individual whoreceived a full refund of all membership fees dining the claim

period will no longer be considered an Eligible'Recipient. [1' Defendant so elects, within 30 days '-

of the date it receives the Preliminary List, Defendant shall provide the People with a list of

individuals who it belieVes received a refund during the claim period, along with written proof

thereof. The People then shall have 30 days to request further information from Defendant and

lodge any objections. 1f the parties are unable to resolve any such objections, either may apply to

the Court for relief on'a'n ex parte basis, with notice, to the other party. In the event the People do

not lodge any objections (or once any objections are resolved), the Claims Administrator will WEsm7s743974. 7 . , -12-

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remove all newly disqualified individuals from the Preliminary List, which shall thereafter

become the “Final List of Payees.”

27. The restitution payments shall be as follows: 1

a. Each Eligible Recipient in the Final List of ’Payees' who ‘is not a current

eHarmony Subscriber as of the date cf entry of this Judgment'shall receive a cash restitution.‘

r '

payment of $29.95. Each'Eligible Recipient in the Final List of Payees'who is a current

eHarmony subscriber as of the date of entry of this Judgment-shall reCeiVe, at eHarmo'ny’s

election, either $29. 95 1n cash or an account Credit from eHarmony of the greater of (1) $29. 95, or

(2) one month’s free service at the same plan and service level as the subscriber’s existing

service.

b. 1~

, If the amount needed to pay all valid cash claims exceeds the initial deposit

\amount into the Restitution Fund, eHarmony shall deliver the additional funds, not to exceed an

additional $750, 000. 00 in cash, to the Claims Administrator within five business days of

receiving such notice.

' 'c.; The total cash and/or credit restittrtion paid shall not exceed $1,000,000.00,

less any amount of Claims Administrator’s fees' 1n excess of $75, 000 .00 credited against the

restitution amount as set forth 1n paragraph 34, below. If the amount of total valid cash and/or

credit claims by Eli gible‘Recipients exceeds that amount, the per4person-amount shall be reduced

‘~ pro-rata so that the $1,000,000.00 total of cashand/or credits (less any amount of Claims'

Adininistrator’s‘fees in excess of- $75,000.00 as set forth in: paragraph 34, below) is'shared

enually by the Final List of Payees. In the event’of such pro' rata reduction of amounts of cash or

credits to-Eligible Recipients, then for the purpose of calculating such pro rata reduction, each

current eHarmony subscriber'to whom eHarmOny elects to “give a credit shall be deemed to -'

receive a credit worth $29.95. V

I

28. Immediately after the Final List of Payees IS prepared, the Claims Administrator

shall calculate the total amount of restitution claimed based on the number of claimants and the

amount of cash or credit due each of them, and shall Communicate that information to the parties;

29. No later than 30 days thereafter, the Claims Administrator shall begin the process wesm7a743974 7 .

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of mailing out restitution checks from the. Restitution Fund for cash rec)ipients and notices of

restitution credit for credit recipients. _F or restitution credits, eHarmony shall apply to the

subscribers’ accounts the restitution credits as per the Final List of Payees and shall submit to the

Claims Administrator and the parties _a declaration under penalty of perjury attesting to the

application of the credits to subscribers? accounts as per the Final List of Payees. / ‘30. _

The Claims Administrator shall include with each restitution check or restitution»

credit netice a- letter explaining that the restitution check or restitution credit isin connection with

this iStipulated Final-Judgment and advising the recipient that the check or credit willexpire

within ninety days of issuance. .

_

31. If any restitution checksor restitution credit notices are returned to the Claims

Administrator as undeliverable, the Claims Administrator will within seven days of receipt

conduct address searches using available credit bureau information and thereafter re—send the

restitution checks or restitution credit notices to all Eligible Recipients for whom updated address

information can be found. (Restitution checks or restitution credit notices that are returned with.I

forwarding address information included shall promptly be delivered to the forwarding address in

question.) . _

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32. Within 120 days .of the mailing of the last restitution check, the Claims

Administrator shall ldetermine the total amount of all uncashed or returned checks and then issue

.

one check including that ainount, plus any remaining funds-in the Restitution Fund, to the

Defendant c/o the -DLA Piper LLP (US) Client Trust Account for the benefit of Defendant.

_ . Claims Administrator Report

7 i

33. , Within 120 days following the last restitution check or restitution credit notice

being mailed, the Claims Administrator shall deliver to the parties a confidential written report of

the restitution program, including the following:I

'

a. - A list of all. Eligible Recipients to whom a notice was sent, including the

type (email or postcard) of notice that was‘sent; 't

b. -A list of all Eligible Recipients who'timely submitted avalid claim form;

' c. '

_ A list of all Eligible Recipients whose claim was rejected for error or

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deficiency and not thereafter corrected; I

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d.' 1'

. The total amount of cash restitution paid out of the Restitution Fund and

the total amount of restitution paid 1n the form of eHarmony account credits; and

.e. _ The balance (if any) remammg '1n the Restitution Fund.

Claims Administrator Fees:

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34., eHarmony shall 'payvall fees and costs of the: Claims Administrator. Within five

days ofNotice of Entry of Judgment, eHarmony shall deposit $75,000.00 into a trust account"

established by the: ClaimsAdministrator for the exclusive purpose bf paying the Claims

Administrator’s fees and costs. If that final amount is less than $75, 000. 00, the amount remaining

in the trust account when the restitution process is complete will be returned to Defendant 0/0 the

DLA Piper LLP (US) Client Trust Account for the benef' t of Defendant. If the fees and costs ’

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exceed $75,000. 00, eHarmony shall within five (5) business days of such notice pay the

difference to the Claims Administrator. That additional amount paid shall be credited against

eHarmony’ s $1,000,000.00 restitution liability limit and shall reduce the total amount of

restitution cash and/or credits due to Eligible Recipients accordingly. ’

,

COMPLIANCE. ,

. 35. For the purpose of securing compliance with the terms of this Judgment,

Defendant'shall, within'307days after Notice of Entry ofJudgment, proVide each of its current

offiCers, directors, and executive committee members with a' c0py of this Judgment. .

‘

36. - Defendant shall keepcustody of all documentation of its compliance with the

notice recuirements of this Judgment for aperiod of three (3) years following Notice of Entry of

this Judgment. Defendant'shalliprovide suCh itemsto the People’s ecunsel upon reaonable

notice.

OTHER PROVISIONS '

. 37.- The Parties waive the right to appeal this Judgment as to form or content.

38. The Partiesshall bear their-own attorneys’ fees and costs, except as provided

.above.

'39. If an ambiguity arises regarding any provision of this Judgment that requires wasnz7s743974 7 _

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interpretation, there is no presumption that'documents should be interpreted against any party.

' The presumption in Civil Code section 1654 is not applicable. The failure of the People to

enforce any provision of this Judgment shall not be construed to relieve any party of .its -'

obligations required by the Judgment'nor be a vvaiver thereof. Should any portion of this '

Judgment be deemed void, the remainder shall remain infull force and effect.,

40. The Court finds that the injunctive provisions and monetary relief included 1n this

Judgment are a fair, reasonable, and appropriate final resoluti>on of this matter.

41. .

Notices‘under this Judgment shall be servedasvfollows:

To the People or People’s counsel:

Douglas B. Allen, Assistant District Attorney Office Of the Santa Cruz County District Attorney -

‘

701 Ocean Street, Suite 200 Santa Cruz, California 95 060

To Defendant or Defendant’s counsel:

Paul J. Hall, Esq.

- ‘

DLA Piper LLP 555 Mission Street, ,Suite 2400 San .Francisco, California 94105

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With a copy to Defendant:

'

eHarmony, Inc.

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42. if any of the laws sought to be enforced by this Judgment are amended, including.

but not limited to the Automatic Renewal Law, California Business & Professions Code § 17600

et seq., the Dating Services Contract Act, California Civil Code § 1.694 et seq., and the Restore

Online Shoppers Confidence Act, 15_ U. S. C. §§ 8401 et seq. then those amended statutes shall

apply ' ‘

_

43. Nothing 1n this Judgment shall be construed as relieving Defendant of 1ts

obligations to comply, or as prohibiting Defendant from complying, with all applicable local,

state and federal laws, regulations or rUles; nor shall any provision of this Judgment be deemed

permission'to' engage in any actsor practices prohibitedby such laws, regulations or rules.

_

44. Pursuant to Business-and Professions Code section 17203 and the Court's inherent

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FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION‘

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authority, the Court shall retain jurisdiction for the purpose of enforcing this Judgment and

enabling any party to this Judgment to apply to the Court for such. further orders and directions as

necessary and appropriate to construe, carry out, enforce, interpret, or modify this Judgment, or to I

redress violations of this Judgment. . \

. 45. This Judgment shall be binding upon its signing by the Court and its filing, and -

upon the service by the‘People of a Notice of Entry of Judgment.

46. The Clerk may enter this Judgment immediately;

Dated: [/5/Ifi

WEST\278743974.7

- - 6L, GMAULP. BURDICK

JUDGE OF THE SUPERIOR COURT

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FINAL JUDGMENT AND INJUNCTION PURSUANT TO STIPULATION